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Determining premium when age rated, not composite rated


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What premium do you charge to continuees when the carrier charges you age and gender banded rates as opposed to composite or average rates? The employer charges the active employees based on an average that the employer determines, even though the carrier actually bills the employer based on the actual age and gender of the employee.

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I’m really confused now. Typically when an insurer develops group composite rates they will take demographics, among other things into consideration, but the group rates would be used to determine COBRA rates. I don’t know of any reason to be looking at individual COBRA enrollees as different from active employees except for the 2% that would be added to the group rates for billing COBRA premiums.

I guess I've never seen a true group insurance plan billed on the basis of individual enrollees' sex and gender. I'd like to know more about that arrangement, because it doesn't sound like group insurance to me.

Hope this makes sense.

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I feel certain that most readers of this message board are accustomed to working with plans that have 100s of employees. In this case, the insured group has dropped below 15 lives, which is the minimum for the carrier, United Healthcare, to offer composite rates. (Below 15 lives they bill the employer based on the gender and age of the covered employees). The group is still COBRA impacted because there are over 20 active employees. Hope that helps paint the picture. Has anyone dealt with this?

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